The High-Speed Rail and the Productivity of Freeway Bus Service Industry: Taiwan’s Case

This study explores the productivity of Taiwan’s freeway bus service (FBS) industry in response to competition from the Taiwan High-Speed Rail (THSR). We employ the Malmquist index to investigate the productivity of Taiwan’s FBS industry and apply the dynamic panel data (DPD) model to identify the factors influencing its productivity. The emergence of THSR initially worsened the total factor productivity of the FBS industry firstly and stimulated it in a longer time period. We also find that year 2007, sales and management expense, the total assets, and capital/asset ratio of an FBS company are the primary factors positively influencing the productivity. However, lagged 1 period Malmquist index service and service diversity reversely influence it significantly.